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In contrast to the prevailing supply-side explanation that price decreases are the key driver of a sales takeoff, we argue that outward shifting supply and demand curves lead to market takeoff. Our fundamental idea is that sales in new markets are initially low because the first commercialized forms of new innovations are primitive. Then, as new firms enter, actual and perceived product quality improves (and prices possibly drop), which leads to a takeoff in sales. To provide empirical evidence for this explanation, we explore the relationship between takeoff times, price decreases, and firm entry for a sample of consumer and industrial product innovations commercialized in the United States over the past 150 years. Based on a proportional hazards analysis of takeoff times, we find that new firm entry dominates other factors in explaining observed sales takeoff times. We interpret these results as supporting the idea that demand shifts during the early evolution of a new market due to nonprice factors is the key driver of a sales takeoff. (New Product Development; Firm Entry; Entrepreneurship), 1. Introduction The early market evolution of successful consumer and industrial product innovations is generally characterized by an initial period of slow growth immediately after commercialization that is eventually followed [...]

Substantial research on inventory has been done over the years, but with little attention to buyer - seller pricing relationships for deteriorating items. We develop a model with an exponentially decaying inventory to determine optimal joint total relevant annual cost of the buyer and seller. Our analysis extends the research to an all-unit quantity discount inventory policy for deteriorating items with various deterioration rates and negotiation factors. The objective is to determine the optimal replenishment interval and discount price so that the joint total annual cost is minimized. Sensitivity analysis in the numerical example shows that optimal order interval and joint system cost are very sensitive to the deterioration rate. This shows the importance of considering the effect of deterioration., INTRODUCTION Discount pricing and ordering policy have been widely used in inventory management to reduce the total system cost. In a business dealing, the buyer controls when to replenish stock [...]

A dynamic model for multiple auctions, wherein sellers, each with a single good to sell, competes for buyers, was constructed. Based on the model, an equilibrium distribution for buyer types was determined and conditions for altering the equilibrium distribution were identified. The analyses showed that although sellers have the ability to alter the distribution of buyer types, equilibrium conditions are the optimum conditions for both buyer and seller.

A private-values model is used to describe the selling techniques of auctions and posted-price selling. Comparisons of the prices of the social optimum and the monopoly seller are provided. The global steepness of the marginal-revenue curve related to the buyer valuation distribution affects the type of sales technique that is used. A uniformly steeper marginal-revenue curve makes auctions more preferable to sellers, even if auctioning is expensive.

The nonlinear pricing problem faced by a multiproduct monopolist operating in a market in the presence of agents with budget constraints was investigated. The existence of an optimal, individually rational and incentive compatible selling mechanism for multiproduct monopolists was also examined. Empirical evidence indicates that an optimal, individually rational and incentive compatible selling mechanism arises if other goods are available and if the multiproduct monopolist's goods are not essential relative to other goods.

We study a repeated game where a seller, who has a short-term incentive to supply low quality, is periodically matched with a randomly selected buyer. Buyers observe only the outcomes of their neighbors' games and may receive signals from them. When the buyer population is large, the seller may sell high quality even when each buyer observes her action in any given period with an arbitrarily small probability. When networking among buyers is costly, low quality is always supplied with a positive probability. For this case, we characterize an equilibrium where the seller randomizes between high and low quality.

A dynamic decision model for the development of a retail network marketing organization (NMO) was developed and studied. NMOs are retail selling channels that utilize independent distributors not only to buy and resell products but also to enlist other distributors to provide a growing network over time. The model indicates that an NMO's network growth, distributor performance and network profitability are dependent on dissimilarities in compensation and other underlying market factors.

Research into a straightforward statistical process for estimating the costs of obtaining and processing information by salespeople is presented. The information acquisition and time allocation model has implications for estimating the optimal territory size and therefore the optimal sales force size.

A new approach is proposed to overcome the problems posed by the balancing approach model. The model sought to maximize profit directly by taking into account the problems associated with allocating selling time across accounts and assigning accounts to territories. The new approach called COSTA, or contribution optimizing sales territory alignment, consists of an assignment model and an allocation model. Results indicate the usefulness of COSTA as evidenced by substantial profit improvements and by outlining the weaknesses of almost balanced territories.